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Focus on Nigeria Economy:Unemployment and 2018 Outlook (1)

Proshare

Wednesday, January 03, 2017 3.00PM  / Proshare WebTV

Recently Proshare WebTV engaged Temitope Babalola of the Proshare Economy Desk to share his perspective on the key issues that will shape the Nigerian economy space in 2018.

He also gave his review of the year 2017 and addressed the issues around unemployment in the country.

According to him, one of the major economic developments that occurred in 2017 was the exchange rate reforms by the Central Bank of Nigeria.

Speaking further, he said the economic output grew significantly, and Nigeria exited the recession in Q2,2017 with a growth rate of about 0.55%, which  was revised to 0.9%.  Babalola said the growth sustained to 1.4%  in Q3, 2017 which beat the forecast of the IMF and World Bank  of 0.8% and 1.2% respectively.

The Proshare analyst said “our external trade also improved, exchange rate was favorable with the naira gaining.  There was successful expansion, improved output which was also very important, external attribute merchandise, capital trade. Those  are very substantial factors and gives green light that the economic is quantitatively better off.”

Giving his perspective on addressing the high unemployment rate (18.8%)  he noted that industrial capacity and the manufacturing sectors, should be a long term economic plan  a country must always have.

He said, as at 2016 Nigeria actually fell into recession due to the cyclical factors that impacted most firms. According to him “In an attempt to reduce their exposure to marginal compression, the companies had to shed off  a significant part of their workforce”. Babalola opined that during a recession it takes a longer time to readjust fixed cost and concluded that a country with low productivity will always face the challenge of  substantial high unemployment.

Proffering solutions he  harped on the need to drive productivity,  stating that “productive economy is always driven by infrastructure, the ease of doing business and  proper legislations for the business environment which is key”.

According to him, what can solve the rate of unemployment is to get the real sector going, noting that the Oil sector which grew by 25.5%, performed more than other key sectors.

Sectors like manufacturing, financial services , trade and ICT were within the bloodletting zone, while the construction sector grew by about 0.4%. He was of the strong view that these sectors must thrive if unemployment is to be tackled in the country.

He urged the Federal Government to take the right policy approach, that will drive the real sector, attract foreign investments, encourage the manufacturing and construction sectors, which will go a long way in addressing the rate of unemployment in the country.

Proshare Nigeria Pvt. Ltd.

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